1962 (1) TMI 8 - SC - Income Tax

Supreme Court Upholds Tribunal Decision on Income-tax Appeal, Emphasizes High Court Route

The Supreme Court dismissed the appellant's appeal from the Income-tax Appellate Tribunal's decision, citing the principle that appeals should not bypass ... Whether the assessee had fully and truly disclosed all material facts necessary for the assessment? Held that:- The Tribunal examined all the relevant materials produced by the assessee at the time of the original assessment and came to the conclusion that there was no omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. The Tribunal referred to the account books produced by the assessee and particularly to the report of the examiner of accounts who submitted a report to the Income-tax Officer with regard to the bank account of the assessee in the Exchange Bank of India and Africa Ltd. In our opinion, in the circumstances of this case the question whether the assessee had or had not failed to disclose fully and truly all material facts necessary for his assessment was a question of fact and we are unable to accept the argument of the learned advocate for the appellant to the contrary. No question of law arose in this case and the High Court of Bombay rightly rejected the petition under section 66(2) of the Income-tax Act. Appeal dismissed. Issues:1. Appeal from the order of the Income-tax Appellate Tribunal.2. Appeal from the order of the High Court of Bombay.3. Application under section 66(1) of the Income-tax Act.4. Application under section 66(2) of the Income-tax Act.Appeal from the order of the Income-tax Appellate Tribunal:The appellant appealed the judgment and order of the Income-tax Appellate Tribunal, Bombay Bench 'C,' which held that section 34(1)(a) of the Indian Income-tax Act, 1922, was not applicable due to no omission or failure by the assessee to make a return of income under section 22 for the assessment year 1945-46. The Supreme Court dismissed the appeal based on the decision in Chandi Prasad Chokhani v. State of Bihar, stating that appeals should not bypass the High Court except in exceptional circumstances.Appeal from the order of the High Court of Bombay:The appellant appealed the order of the High Court of Bombay, which rejected the application under section 66(2) of the Income-tax Act. The High Court dismissed the application summarily, leading to the appellant's contention that the Tribunal's finding was based on surmises and conjectures. However, the Supreme Court held that no question of law arose, as the Tribunal had thoroughly examined all relevant materials produced by the assessee during the original assessment.Application under section 66(1) of the Income-tax Act:The appellant moved the Tribunal under section 66(1) of the Income-tax Act, seeking to state a case to the High Court of Bombay on a specific question of law. The Tribunal rejected the application, stating that the question was a matter of fact, not law, and was misconceived. The appellant then pursued an application under section 66(2) of the Income-tax Act, which was summarily dismissed by the High Court of Bombay.In conclusion, the Supreme Court found that the Tribunal's decision was based on a thorough examination of all relevant materials, and no question of law arose from the Tribunal's order. The High Court of Bombay was justified in rejecting the petition under section 66(2) of the Income-tax Act. Therefore, both appeals were dismissed, and no costs were awarded in this case.